Evolving From Cornhole to Extreme Sports

UnknownDon’t get so cocky, Red Bull! Mountain Dew always has and always will be chomping at your heels.

PepsiCo’s citrus-flavored soft drink is more than just a beverage. The current slogan of “Do the Dew” emphasizes it is a lifestyle brand that’s been strongly connected to niche markets for more than 20 years.

The brand began in the hills of East Tennessee in the 1940s. In 1993, Mountain Dew began getting a feel for extreme activities, like skydiving and mountain biking.

Jason Belzer wrote in a Forbes article that the brand has focused its sports marketing and sponsorship strategy on just one goal: being synonymous with the extreme.

Just like eating crackerjacks reminds us of baseball, drinking Mountain Dew triggers an association with action sports (fast, exciting, extreme).”

The bridge between rural consumers and young, active consumers was cemented by signing a sponsorship deal during the original X Games in 1995. In 2002, Mountain Dew started the Free Flow Tour, an amateur skateboarding competition. The Dew Action Sports Tour with NBC Sports began in 2005.

Now, the average consumer isn’t going to want to immediately go snowboarding after drinking Mountain Dew, but as Belzer states:

Having a deeply rooted association with pleasant and enjoyable feelings is an incredibly powerful tool that helps drive consumer behavior.”

Mountain Dew is building and strengthening relationships with buyers before and after competitions with movies, music, and online content.

MD Films released First Descent in 2005. The documentary, centered on the rise of snowboarding, was the first motion picture produced by a soft drink company.

The brand released “A Mini Mini-Series” in August 2014. According to the show’s YouTube page, users can watch all eight episodes in just two minutes.

Green Label is the company’s online magazine “featuring the latest stories and emerging trends in skate, music, art, gaming, and more.” Green Label Sound is a record label for emerging artists, which recently launched the Green Label Station on iTunes Radio. Mountain Dew is even sponsoring the “Anything Goes Tour” for the country duo sensation Florida Georgia Line.

The brand is effective in communicating through social media. Instead of buying airtime for a 30-second Super Bowl commercial, the company ran a spot for its new Kickstart line during the pre-game show and then continued the conversation with more than 10 million combined followers on Facebook, Twitter, and Instagram.

Beverage Digest reports Mountain Dew was the third most popular refreshment brand in 2014, and about 20 percent of its consumers are responsible for 70 percent of its volume. As Denise Lee Yohn, a marketing consultant, told the Huffington Post in January:

By focusing on a ‘cult, loyal following,’ Mountain Dew may be better poised than other sodas to survive the health and wellness obsession that has swept the country in recent years.”

Mountain Dew is highly successful in leveraging their sponsorship across brand communications. These niche markets appreciate the attention and are willing to reward the company by opening their wallets.

Planning For A $7 Billion Market Spike In 3 Years

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A recent survey from McKinsey, a global consulting firm, claims frugal is the new normal. The survey found four in ten Americans trimmed their spending in the past 12 months, while 55% are searching for ways to cut back.

When it comes to entertainment, particularly sports, people are not pinching pennies. According to the 2014 edition of the PwC Sports Outlook, the market is expected to grow by $7.2 million from 2015 to 2018.

There are four key segments within the North American revenue stream: gate receipts, media rights, sponsorship, and merchandising.

Media rights are projected to continue growing at the highest rate: 26.06% of total revenue in 2015 to 27.36% in 2018. Sponsorship will also see an increase from 24.08% to 24.85%, while the shares of gates revenues and merchandise are expected to fall.

Notice the give-and-take relationship between gate revenues (-.77%) and media rights (+1.3%) from 2015 to 2018. Fans are not going to just give up and stop consuming sports. They will either watch in person or on a broadcast.

Disposable incomes are limited. Organizations are constantly struggling to find ways to sell tickets and fill stadiums/arenas. Consumers want more of an experience than just watching a ball get passed around while they sit and get a sunburn or frostbite.

The Tennessee Titans heard the gripes, so Comcast is installing WiFi at LP Field before the upcoming season. AT&T installed two new 4G LTE antennas in 2012 near the Bridgestone Arena to accommodate an increase in mobile use. The Jacksonville Jaguars recently put up cabanas with a fully serviced, premium tailgate/seating experience. EverBank Field also offers two swimming pools where fans can watch games. The Tampa Bay Buccaneers have a life-size pirate ship at Raymond James Stadium. Other facilities are making changes to their seating, concessions, and parking lots.

As fans decide to stay home and watch a game, leagues realize media rights will increase $2.6 million in 2018. The National Football League just renewed its contract with CBS to broadcast eight games on Thursday nights for more than $275-$300 million. Several current deals are expected to expire by 2018, and the media companies already know it’ll be costly to renew. Organizations are also striking up conversations about online streaming, OnDemand, and mobile apps.

Keep in mind that nothing beats the live atmosphere on game day, which explains why gate revenues still make up the biggest piece of the pie in 2015 and 2018.

Sponsorship is dependent on the economy (+$2.2 million and +.77%). PwC lowered its five-year growth rate from six-percent per year to just under five-percent per year. The reason:

A slower roll-out and slightly less optimistic outlook for the potential net impact of new sponsorship inventory resulting from digital media platforms, uniform rights, and in-venue signage/naming rights, as well as further brand category rights segmentation.”

Local facility naming rights will continue to increase revenue as a lot of contracts are expected to expire soon.

Merchandise will see very little growth in terms of dollar amount (+$580 million) and the biggest drop in percentage (-1.29%). If someone has a team jersey or hat, they probably won’t buy another one. One way organizations can increase this segment is by changing logos or color schemes. There is also a need to focus more on women, children, and electronics. Dooney & Bourke, a leading handbag company, is now offering Major League Baseball and collegiate products.